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HomeMy WebLinkAboutECHDA22-13 Conditional Commitment Letter_Habitat for Humanity - 3rd Street development EAGLE COUNTY HOUSING AND DEVELOPMENT AUTHORITY CONDITIONAL FUNDING COMMITMENT LETTER December 20, 2022 Habitat For Humanity RE: ECHDA Conditional Funding Commitment Letter Third Street, Habitat for Humanity Dear Mr. Welaj, Eagle County staff has reviewed the application for funding submitted by Habitat for Humanity (“Habitat”) for the Habitat Third Street Development, a proposed 16-unit housing development on 2 acres of land located in Eagle, CO (the “Project”). The Project consists of 16 for sale deed restricted price-capped units, constructed in partnership with the Eagle County School District (“ECSD”). ECSD is donating the 2-acre parcel of land to Habitat for construction of the Project. Twelve units will be sold to ECSD employees whose family earns between 80-100% of Area Median Income (“AMI”) as determined and published by the Secretary of Housing and Urban Development. Four units will be sold through Habitat’s conventional sales process to families that earn between 35-80% AMI. The Project will be all electric, net zero ready. Habitat received approval for the Project from the Town of Eagle on November 8, 2022. Site construction is scheduled to begin in spring 2023, with unit delivery Q4 2023 or early Q1 2024. ECHDA contributed $200,000 ($12,500 per unit) to this Project in summer of 2022, to cover building and tap fees costs. Habitat has requested an additional $3,920,000 in funding from the ECHDA. Following review of Habitat’s funding application, and based on the criteria in the Eagle County Housing Guiding Principles document and an evaluation of existing units and other projects under development, County staff recommended a maximum grant of $200,000 per unit/price-capped deed restriction. Because this Project is achieving net zero ready, staff also included a $5,000 energy efficiency incentive in the subsidy analysis to assist in offsetting the additional costs associated with the mechanical systems for the units. To account for the prior ECHDA contribution to Habitat for $200,000 in building and tap fees, staff deducted that amount from the recommended DocuSign Envelope ID: 0175F02A-C9CF-418C-BA04-04AF25C62A2D current contribution of $3,080,000 or $192,500 per unit. ECHDA’s total contribution will total $3,280,000 or $205,000 per unit. At a regularly scheduled public meeting held on December 20, 2022, the ECHDA Board reviewed Habitat’s request for funding, and heard presentations from County staff and Habitat representatives. Based on the criteria in the Eagle County Housing Guiding Principles document and an evaluation of existing units and other projects under development, and subject to the terms and conditions set forth below, the ECHDA Board approved funding for the Project in an amount not to exceed $3,080,000, which sum represents $192,500 per unit/price-capped deed restriction, which includes $5,000 per unit as an energy efficiency incentive (the “Grant Award”). Total funding shall not exceed $3,280,000. The terms and conditions of the Grant Award are as follows: 1. The Grant Award is subject to approval and execution of a grant agreement between Habitat and the ECHDA that outlines the funding amount, timing of disbursements, the terms of the price capped deed restriction as well as the requirements for the Project’s net zero-ready mechanical components (the “grant agreement”). Habitat understands and agrees that this grant agreement must be approved by the ECHDA Board at a regularly scheduled and public meeting. 2. The Commitment agreement shall terminate 12 months from the date of the ECHDA’s approval of the Grant Award, or on December 20, 2023 (the “Grant Period”). All funds must be expended during the Grant Period. Habitat shall commence and diligently pursue construction of the Project during the Grant Period. In the event Habitat is unable to commence construction or if Habitat stops construction during the Grant Period, the grant agreement shall terminate and no further funds shall be disbursed by the ECHDA for the Project. Any funds not used or expended during the Grant Period must be returned to the ECHDA. If, after payment of the Grant Award, ECHDA reasonably determines that payment was improper because the purposes for which the payment was made were misrepresented, or the terms of the grant agreement were breached, then upon written notice of such determination and request for reimbursement from ECHDA, Habitat shall forthwith return such payment to ECHDA. 3. The ECHDA shall not disburse the Grant Award until Habitat demonstrates to the satisfaction of the ECHDA that it has secured additional funding commitments from other sources sufficient to fully fund construction of the Project. Habitat agrees that upon request of County staff, it shall provide ECHDA or its representatives with access to its books and records and proformas for the Project and shall further provide copies of any commitment letters of funding agreements from other sources for the funding of the Project. 4. Habitat agrees that the Grant Award may be used and expended solely for construction of the Project, as specified herein and in its ECHDA grant application dated September 28, 2022. The Grant Award set forth herein is for the specific Grant period and ECHDA makes no DocuSign Envelope ID: 0175F02A-C9CF-418C-BA04-04AF25C62A2D representations, nor should Grant Recipient rely on this award as a representation of any future awards for other grant periods. 5. Habitat agrees to submit to ECHDA a report detailing how the Grant Award was expended for the Project, including proof of 16 recorded price capped deed restrictions and a discussion as to how the requirements for the Project’s net zero-ready mechanical components were met. The report will be due no later than the development’s application for temporary certificate of occupancy. 7. Habitat agrees that price-capped deed restriction approved by the ECHDA Housing Director and the County Attorney’s Office shall be recorded against the Project units immediately following approval of any plat required by the Town of Eagle for the Project, and prior to issuance of TCO for any unit. 8. Habitat shall indemnify and hold harmless the ECHDA, Eagle County, and any of their respective officers, agents and employees against any losses, claims, damages or liabilities for which ECHDA and/or County may become subject to to the extent that such losses, claims, damages or liabilities arise out of, directly or indirectly, this Conditional Funding Commitment Letter and/or the grant agreement, or are based upon any performance or nonperformance by Habitat or any of its sub-recipients hereunder; and Habitat shall reimburse ECHDA and/or County for reasonable attorney fees and costs, legal and other expenses incurred by ECHDA and/or County in connection with investigating or defending any such loss, claim, damage, liability or action. This indemnification shall not apply to claims by third parties against the ECHDA and/or County to the extent that ECHDA and/or County is liable to such third party for such claims without regard to the involvement of Habitat. 9. Habitat shall maintain, for a minimum of three (3) years, adequate financial and programmatic records for reporting to ECHDA on performance of its responsibilities under the grant agreement. Habitat shall be subject to financial audit by federal, state or county auditors or their designees. Habitat authorizes ECHDA to perform audits or to make inspections during normal business hours, upon 48 hour notice to Habitat for the purpose of evaluating performance under the grant agreement. Habitat shall cooperate fully with authorized ECHDA or County representatives in the observation and evaluation of the Project and records. 10. This Conditional Funding Commitment Letter has been issued to Habitat on the basis of certain information and materials provided by Habitat to the ECHDA. ECHDA reserves the right to terminate or amend this Conditional Funding Commitment Letter based upon information which comes to its attention after the date of this letter. Any misinformation, misrepresentation, or withholding of material information incident hereto or the occurrence of any material adverse change to Habitat, its funding for the Project, the composition or unit mix of the Project or the nature of the deed restriction shall, at the sole option of ECHDA and without DocuSign Envelope ID: 0175F02A-C9CF-418C-BA04-04AF25C62A2D limitation to any other right or remedy of ECHDA, void the Grant Award and all of ECHDA’s conditional commitments hereunder. 11. This Conditional Funding Commitment Letter sets forth the entire agreement of the parties with respect to the subject matter hereunder, and supersedes all prior written (including, but not limited to, any grant application executed in connection with the funding) or oral understandings with respect hereto. No modification or waiver of any provision of this Conditional Funding Commitment Letter shall be effective unless the same shall be in writing and signed by all the parties hereto. It is also hereby intended that this Commitment shall not survive the execution of the grant agreement and that once executed, the grant agreement shall set forth the entire agreement of the parties to the Grant Award. Please confirm your agreement to the foregoing terms and conditions of the Conditional Funding Commitment Letter by signing below. Eagle County Housing and Development Authority By: ________________________________ Its: ________________________________ Habitat for Humanity By: __________________________ Its: ____________________________ DocuSign Envelope ID: 0175F02A-C9CF-418C-BA04-04AF25C62A2D Jeanne McQueeney John Welaj